WealthSimple Review: The Robo Advisor With Feelings

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Is investing hard? Not really. At The College Investor, we believe that lazy investors grow rich. Investors rarely need to learn about anything beyond basic asset allocation. Once you figure out some jargon and automate a habit of sensible investing, you’re set.

It’s easier than ever to start investing in publicly traded stocks and bonds. It’s cheaper than ever to own financial products that track the upward march of the stock market. But not everyone is swimming in cash. Why?

Person after person tells us that investing has to click. If the investing light hasn’t clicked on for you, consider checking out Wealthsimple. It’s an automated investing platform that offers personal touches.

Call it a Robo Advisor with feelings. And as the name implies, they keep investing simple.

Check out Wealthsimple here, and College Investor readers get $10,000 managed free for one year.

Disclaimer: The College Investor has entered into a referral and advertising arrangement with Wealthsimple US, LTD and receives compensation when you open an account or for certain qualifying activity which may include clicking links. You will not be charged a fee for this referral and Wealthsimple and The College Investor are not related entities. It is a requirement to disclose that we earn these fees and also provide you with the latest Wealthsimple ADV brochure so you can learn more about them before opening an account.

Wealthsimple Basics

Like most roboadvisors, Wealthsimple emphasizes the four pillars of modern portfolio theory:

Low Costs

Broad Market Index Funds

Asset allocation

Automated Rebalancing

If you invest your money with Wealthsimple, you put your money into cost efficient ETFs. ETFs have tax advantages for people not investing in retirement accounts. They also have extremely low fees.

Wealthsimple only allows investors to choose broad market index funds. You can’t choose individual stocks. You basically buy a slice of the US stock market, a slice of the world stock market, and a slice of some bond markets.

The only real decision that Wealthsimple clients need to make is their asset allocation. Wealthsimple aims to give their clients as much growth potential as possible. However, humans struggle to stay invested during downward volatility. To keep their clients invested during dips, Wealthsimple invests some money in assets that grow slower but have less negative volatility.

Finally, Wealthsimple keeps you invested in your ideal asset allocation. No need to login or do fancy math. They will take care of it for you.

Wealthsimple will even review of your entire portfolio (including accounts you don’t hold at Wealthsimple). They will advise you on changes to make in other accounts, so that your investments fit your goals and risk profile better.

Wealthsimple charges 0.5% of your total portfolio if your portfolio is worth less than $100,000. Portfolios worth $100,000 and up have a fee of 0.4% (this level is called Wealthsimple Black). However, remember that College Investor readers get $10,000 managed free for one year.

These rates are a bit higher than Wealthfront and Betterment, but Wealthsimple offers an important perk that these larger firms don’t. I explain those below.

Today, Wealthsimple manages over $750 million in invested assets. It is quickly becoming one of the largest robo advisors in the market.

The broad market ETFs for socially responsible investors have higher expense ratios than those of other investors. However, they might be worth the extra cost if it means you can have an easier conscience.

Wealthsimple Trade

In August 2018, Wealthsimple announced Wealthsimple trade – it’s challenge to the multiple companies that are offering commission free trading. Wealthsimple users will be able to buy, sell, and track over 8,000 stocks and ETFs. There’s no account minimum, and they’ll get unlimited commission-free trades. This is a great way to invest at a low cost.

Right now, this program is only offered via a waitlist in Canada, but the waitlist is open now (in Canada only). If you’re Canadian and interested in trading, check out this option.

Wealthsimple Black: Unlocking the Heart

Although Wealthsimple offers decent investment options, their real value proposition is for investors with more than $100,000 in assets. Investors with more than $100,000 managed by Wealthsimple become Wealthsimple Black clients. Wealthsimple Black clients benefit from more than Wealthsimple’s technology. They benefit from Wealthsimple’s people.

Wealthsimple Black clients can meet with financial planning experts to discuss your savings and investing goals. Clients who develop rapport with a certain advisor can schedule future calls with the same person. With this service, customers get a human advisor who uses technology to manage their portfolio.

This hybrid model offers the best of human advisors and technology. You get access to a money coach when you need their advice, but you get an algorithm to manage your investments.

This is a much better price than Betterment’s 0.4% “Plus” client level that only allows you to talk with a CFP once per year.

To sweeten the deal, Wealthsimple also offers two major perks to Wealthsimple Black clients. First, they enroll you in tax loss harvesting. Tax loss harvesting won’t make you rich, but people with non-retirement portfolios may see a few basis points of improvement when it’s implemented. Tax loss harvesting is one reason to consider a Robo-Advisor if you’re wealthy.

Wealthsimple Black customers also get access to Priority Pass airport lounges. Admittedly, this is a bizarre perk for a financial company to offer. However, it’s a nice bonus if you plan to use a robo-advisor anyways.

If you’re considering a robo-advisor, give Wealthsimple a try. College Investor readers get $10,000 managed free for one year.

WealthSimple Review

Commissions & Fees - 80

Customer Service - 70

Ease Of Use - 80

Tools & Resources - 50

Investment Options - 80

Specialty Services - 80

73

Summary

Person after person tells us that investing has to click. If the investing light hasn’t clicked on for you check out our Wealthsimple review.

Filed Under: Investing, ReviewTagged With: Investing, Robo Advisors, WealthSimple, WealthSimple ReviewEditorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.

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About Robert Farrington

Robert Farrington is America's Millennial Money Expert, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here.

One of his favorite tools is Personal Capital, which enables him to manage his finances in just 15-minutes each month. Best of all - it's free!

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a mix of properties through Fundrise. Worth a look if you're looking for a low dollar way to invest in real estate.

Comments

Sounds interesting in some ways. It’s nothing for me but I see people stop investing on downward volatility often. Investing has a lot to do with emotions. You really have to make good decisions and believe in the picked stocks/ETFs. Then you actually don’t have to look at them very often. They will grow.